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Internationals add $338m+ to Sweden annually

International students add between SEK 3.5-4 billion (US$338 million-386m) to the Swedish economy each year, according to a new report from the Swedish Institute.

"It is evident that international students studying and working in Sweden have a significant economic impact on the Swedish economy," the report noted. Photo: iStock

Between 2013-21, the income tax contributed to Sweden's coffers by international students stands at between US$63m-124m per year

The findings put the country’s education sector as a “considerable” export sector that is level with income from Sweden’s music exports that added SEK 2.7bn in 2019, the public agency noted.

The report analyses the period since tuition fees were introduced for non-EU students in 2011/12, and found that so-called freemover-students (who themselves choose where they will study and fund their own tuition) are responsible for 90% of the annual income the country gains.

Around 30% of economic impact was made up of tuition fees, with costs on housing, food, entertainment, travel, making up the remainder. On average, each international student contributed around SEK 140,000 ($13,500) to the Swedish economy during the 2020/21 academic year.

Along with the economic benefits that international students bring, those who establish themselves in the Swedish labour market contribute to the country’s competitiveness through their added competence and expertise.

Between 2013-21, the income tax contributed to Sweden’s coffers by international students stands at between SEK 700-1,300 million ($63m-124m) per year.

Their potential annual consumption spend is estimated at between SEK 800-1,400m ($77.3m-133m)

“In addition, it can be assumed that those international students who have established themselves on the labour market also contribute to increased demand on labour through multiplier effects on their consumption and income tax,” Madeleine Sjöstedt, general director at the Swedish Institute said in the report.

She added that in many parts of the world education exports is a “significant industry”, highlighting Australia where education is the country’s third biggest export.

“But only now is Sweden getting an overall picture of how big this important industry is for the country’s economy,” she said.

The report identifies the economic gains international students bring to Sweden, but also the “broadened culture”, improved ability to innovate as well as an additional skills supply.

“Swedish universities and students benefit from international students, through increased diversity and new perspectives,” Sjöstedt continued. “That, in turn, leads to increased education quality.

“In the long run, it shows the importance of attracting more international students to Sweden”

“In the long run, it shows the importance of attracting more international students to Sweden. Additionally, it shows the need for concrete efforts to retain international students that have graduated from Swedish universities and colleges in order to bring highly qualified individuals to Swedish companies.”

Figures from the Swedish Higher Education Authority suggest that after a 28% decline in new international student enrolments in Sweden in 2020/21, numbers are well on their way to recovering.

The report also highlighted that three in four international students want to remain in Sweden after graduation, but only three in 10 actually do.

The Confederation of Swedish Enterprise has previously warned that complicated work and residence permit regulations, lack of contacts in the labour market, low wages, lack of knowledge about recruitment processes and the Swedish labour market and insufficient support from higher education institutions all lead to students leaving Sweden after their studies.

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